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Measuring Costs And Benefits Of Non-Tariff Measures In Agri-Food Trade

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  • Beghin, John C.
  • Disdier, Anne-Celia
  • Marette, Stephan
  • van Tongeren, Frank

Abstract

This paper provides a systematic welfare-based approach to analyze the impact of non-tariff measures (NTMs) on trade and welfare in presence of market imperfections. We focus on standard-like measures such as technical barriers and sanitary and phytosanitary regulations. The approach overcomes the shortcomings of the mainstream approach based on the analysis of forgone trade caused by trade costs. The latter ignores market imperfections: welfare increases when NTMs are removed and trade expands. We explain how to account for external effects and market failures in trade-focused welfare analysis, leading to a more balanced overall assessment of measures despite a potential reduction of trade flows. We show that the relationship between trade, welfare, and NTMs is complex. The optimum NTM is often not zero. An application to shrimp trade illustrates the feasibility of the proposed approach. The illustration shows that the reinforcement of a food safety standard can be socially preferable to the status-quo situation, both domestically and internationally

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 32393.

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Date of creation: 24 Jan 2011
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Publication status: Published in World Trade Review 2012, vol. 11, pp. 356-375
Handle: RePEc:isu:genres:32393

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Keywords: externality; trade; Welfare; Non-tariff measures; NTM;

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References

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  1. van Tongeren, Frank & Beghin, John C. & Marette, Stephan, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," Staff General Research Papers, Iowa State University, Department of Economics 13146, Iowa State University, Department of Economics.
  2. Disdier, Anne-Célia & Marette, Stéphan, 2012. "How do consumers in developed countries value the environment and workers’ social rights in developing countries?," Food Policy, Elsevier, Elsevier, vol. 37(1), pages 1-11.
  3. Disdier, Anne-Celia & Fontagne, Lionel & Mimouni, Mondher, 2007. "The Impact of Regulations on Agricultural Trade: Evidence from SPS and TBT Agreements," Working Papers, TRADEAG - Agricultural Trade Agreements 18869, TRADEAG - Agricultural Trade Agreements.
  4. Disdier, Anne-Celia & van Tongeren, Frank W., 2009. "Non-Tariff Measures in Agri-Food Trade: What Does the Data Tell Us? Evidence from a Cluster Analysis on OECD Imports," 2009 Conference, August 16-22, 2009, Beijing, China, International Association of Agricultural Economists 51759, International Association of Agricultural Economists.
  5. Disdier, Anne-Célia & Marette, Stéphan, 2010. "The Combination of Gravity and Welfare Approaches for Evaluating Non-Tariff Measures," CEPREMAP Working Papers (Docweb), CEPREMAP 1004, CEPREMAP.
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Cited by:
  1. Li, Yuan & Beghin, John C., 2012. "Protectionism Indices for Non-Tariff Measures: An Application to Maximum Residue Levels," Staff General Research Papers, Iowa State University, Department of Economics 35276, Iowa State University, Department of Economics.
  2. Bo Xiong & John C. Beghin, 2013. "Disentangling Demand-Enhancing and Trade-Cost Effects of Maximum Residue Regulations," Food and Agricultural Policy Research Institute (FAPRI) Publications, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University 13-wp544, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  3. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," Proceedings Issues, 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, FL, International Agricultural Trade Research Consortium 116898, International Agricultural Trade Research Consortium.
  4. Olivier Cadot & Julien Gourdon, 2012. "Assessing the price-raising effect of non-tariff measures in Africa," Working Papers 2012-16, CEPII research center.
  5. Olivier CADOT & Ernawati MUNADI & Lili Yan ING, 2013. "Streamlining NTMs in ASEAN: The Way Forward," Working Papers, Economic Research Institute for ASEAN and East Asia (ERIA) DP-2013-24, Economic Research Institute for ASEAN and East Asia (ERIA).

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